Opinions Gordon Reid
Apple IncAAPLBUYMay 30, 2014
Gordon ReidStock price when the opinion was issued
As of Jun 08, 2026. Market Open.
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It isn't raising billions to develop AI (like its peers are), but is piggybacking on their peers' research. They're probably right to not invest, because the cost of the AI build-out is insane, so can those companies maintain spending? On Monday, Apple holds its Worldwide Developers Conference.
Has been aggressively buying this since last March though stopping now. The Siri app with interface with LLMs and the iPhone 18. The stock is becoming about momentum more than fundamentals.
Joe TerranovaIt's incredible it is keeping up with the market, up 14% this year while their capex is down vs. others going up. Their balance sheet is fortress-like. The iPhone and iPad will be the devices we will use for AI, not others. Deserves this PR. More upside to come.
Bryn TalkingtonIs one of the best-run companies ever with great margins and great growth. A recent knock is that they lack innovation. Their googles were a flop and are absent in AI--though maybe they're waiting for the dust to settle before they buy an AI company. Maybe they're positioning with the next era of Apple as they transition to a new CEO.
A dividend pick. Dividend are one of the best, easiest ways to hedge against inflation. This is a dividend grower, increasing each year by nearly 5% annually over the past 5 years. The total return over 3 years is 80%.
Kevin SimpsonReally good opportunity on the AI front. Hasn't missed the boat; by its history, lets other companies do the heavy lifting and then steps in when things are more mature. Then a decade later they own the sector.
Talk of an AI phone. Changes in management (interesting tell that CEO has a hardware engineering background). Tremendous resources. Generates an unbelievable amount of cash. Yield is 0.36%.
Gordon Reid
Capex for the quarter was nothing compared to the other guys. The GOAT of companies. Demand for products continues strong. Stock's up today on guidance of double-digit topline growth.
Barry SchwartzCredit them for not getting into the AI arm race and spending a gazillion dollars unlike at least four peers. Meanwhile, they announced enough cash flow to announce another $100 billion share buyback and increasing their dividend. Also, services revenue came in at a record high and 16% growth, their profit generator going forward. iPhone sales have been surprisingly steady recently. The valuation is high, but can grow into that valuation, say they go into a new hardware phase under the new CEO.
Had a very good quarter. Chinese sales are rebounding, up 28%, services hit a new record, gross margins at 49.3% and a $100 billion share buyback. iPhone sales are a little light, but Apple is exciting. He holds a full position. True, it's valuation is too high, but deserves that premium. Give credit that they reduced capex during this period of huge AI spending.
Kevin SimpsonNew CEO will have to prove himself. Company's had ups and downs but, ultimately, knows how to succeed. Its AI strategy is based on what it's done all along -- let other people spend the $$ initially, and then step in and take the helm.
Gordon ReidIt has enormous free cash flow and has 20% of the world's smart phone market. It is not a hyper-scaler name so does not have hundreds of millions in capital expenditures like the other hyper-scalers. The service part of its business is adding growth with an overall earnings growth rate of 12 to 15% along with solid margins. AI is embedded in partnerships with different companies. It is at its 200 day moving average so maybe it is time to add.
Stan Wong
Buy more Qualcomm (QCOM-Q) or go to Apple (APPL-Q)? Diversification is always a good thing. What percentage of Qualcomm makes up your portfolio? Without that info, he prefers to give just a broad answer to the question. Apple has lots of legs, and is being driven by a few things including first and foremost, innovation. There has been a lot of talk that innovation is dead at Apple. Looking back to the time between the interaction of the iPod, the introduction of the iPhone, followed by iPad, we are really not out of sync so much. Apple is primed for a very big jump if and when they come out with a product that in any way looks like it comes close to the iPod, iPhone and the iPad. If they do, you will see organic growth in earnings and cash flow and revenues rise dramatically. What will really drive the stock is that the multiples will rise because the confidence of the investors will rise to the point that they will be willing to pay more per $ of earnings, being a P/E ratio. Right now the P/E ratio on Apple is quite muted and could rise 25%, 30%, 50%.